Finance is a significant part of human life. People put in enormous efforts to earn money, which is never enough. But from the point of view of economic science, finances are only means that are used to achieve certain goals. They are endowed with functions, the implementation of which leads to the activation of specific processes. The role of finance is very important in our society. For many, money is the purpose of existence. People spend precious years of their lives to earn as much as possible and die in luxury.
The distributive function of finance in the activities of the enterprise. Key Features
The most significant is the distributive function of finance. This feature can be observed at all levels of economic activity of society: state, region, enterprise, family and individual. The distributive function provides for the creation of funds and deductions to ensure the activities of a particular entity. If we talk about the enterprise, then special funds are formed, the resources of which go to cover the needs and requirements. For example, the wage fund allowswithhold from the profit of the enterprise an amount that will cover the costs of creating goods or providing services.
The formation of financial resources is a very important stage in the commercial activity of an enterprise. It is this reserve that allows companies to develop, master new technologies or expand their presence geographically. The distributive function of finance also provides for the creation of reserves to cover risks, pay social benefits and subsidies, and resolve unforeseen situations. Modern innovative methods require constant investment and improvement in the means of production and training.
Distribution function of finances in family life
The family, as a separate component of society, has its own obligations and plans that require appropriate investment of funds. Mandatory payments include utility and rent payments, expenses on loans and borrowings, contributions to educational and educational institutions. In addition, some kind of funds are being created, through which the purchase of the most expensive things, furniture, equipment, as well as the organization of children's or general recreation.
When money enters the family budget, they are subject to distribution depending on specific needs and requirements. As in an enterprise, financial resources are subject to planning and forecasting, depending on what their further use takes place.
Role and importance
The distributive function of finance leads to an opportunity to plan further growth and development of the enterprise, improve living conditions and acquire additional benefits. Considering money as a tool to achieve your goals leads to the realization of their true value and significance. Companies and governments learn how to properly manage their available funds when they stop perceiving finance as the very goal of their activities.
